What is crypto currency and should you invest in bitcoin
Bitcoin, I’m sure the word rings so many bells. A concept that in recent years has taken the internet by storm and has created a whole new wave of currency, Cryptocurrency. As I’m sure you have heard, Bitcoin is the largest most prominent cryptocurrency. Nonetheless, few know the history, how the currency works and if you should invest in it.
Put simply, Bitcoin is purely operated online and unlike government-issued currencies, it is operated by a decentralized authority. It is unregulated and very volatile.
Many would be skeptical about investing online, and in an online currency, mainly due to not trusting online security and the thought of their information or money being stolen. In reality, that is not the case as the technology and system that Bitcoin uses is very safe and virtually unhackable. The Bitcoin code is run in a collection of computers referred to as nodes.
These nodes are scattered all around the world and number in the thousands. This decentralizes the Bitcoin network making it very difficult to target. These nodes also house a specific type of database known as blockchain. Nodes and blockchain are key to making Bitcoin safe. Blockchain works in a way that stores data and transactions in boxes, or “blocks”. As Bitcoin transactions happen live, blocks are visibly filled with set transactions which are also constantly being verified for legitimacy. This way, no one can cheat the system. The transparency and sheer width of the network is what makes Bitcoin a safe online network.
As popularity in cryptocurrency and specifically Bitcoin grow, the recurring question raised is “Should I buy Bitcoin?”. The simple answer is, if you have the money, go for it. Though very volatile, over the last ten years Bitcoin has seen serious gains (300% annual returns in 2020) and many see it as the future of currency. Nevertheless, you should be prepared to see violent fluctuations in price. Through thick and thin Bitcoin is still considered by many investors to be a great asset to one’s portfolio.